Investor Presentation - February 2012


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Raymond James 2012 Global Airline Conference

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Investor Presentation - February 2012

  1. 1. Raymond James 2012 Global Airline Conference February 2nd 2012
  2. 2. Disclaimer• This notice may contain estimates for future events. These estimates merely reflect the expectations of the Company’s management, and involve risks and uncertainties. The Company is not responsible for investment operations or decisions taken based on information contained in this communication. These estimates are subject to changes without prior notice.• This material has been prepared by Multiplus S.A. (“Multiplus“ or the “Company”) includes certain forward-looking statements that are based principally on Multiplus’ current expectations and on projections of future events and financial trends that currently affect or might affect Multiplus’ business, and are not guarantees of future performance. They are based on management’s expectations that involve a number of business risks and uncertainties, any of each could cause actual financial condition and results of operations to differ materially from those set out in Multiplus’ forward-looking statements. Multiplus undertakes no obligation to publicly update or revise any forward looking statements.• This material is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Likewise it does not give and should not be treated as giving investment advice. It has no regard to the specific investment objectives, financial situation or particular needs of any recipient. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. It should not be regarded by recipients as a substitute for the exercise of their own judgment. 2
  3. 3. Multiplus is a growing loyalty network Network connecting people and companies around 9 mln 20.0 bln almost 170 members points sold in 3Q11 partnerships +17.0% YoY +38.5% YoY +26.3% YoY points from several programs in positive network effect powerful support for partners to one single account generating strong growth acquire and retain clients Multiplus Exclusive and Strategic Relationship with TAM 2009: spin-off from TAM’s loyalty program Long term agreement (15 years + additional 5 year periods) 2010: launched as separated business unit and IPO Most desired airline in Brazil (Ibope Research) and Star Alliance member TAM SA holds 73,2% stake Air tickets: most appealing redemption with high value perceptionNote: based on 3Q11 3
  4. 4. Innovative business model Strong cash generation Low CAPEX requirement Negative working capital Scalable business Debt free Dividend player Sources of Profit (Joint Venture) outsourcing and CRM points selling $ services redemption unit revenue less unit cost $ spread point expiration $ breakage # of months 0 ~10 24 CASH IN CASH OUT ~10 months float $ interest income 4
  5. 5. Growing coalition network… Magazine Air Travel Travel Agency Gas Stations Bookstore Hotels Telecom Pay-TV Apparel Education Suscriptions Insurance Stock Exchange Members can collect and also redeem points in any coalition partner. Stock Broker Drugstore Real Estate Universities e-Commerce Beauty and Furniture and Gym Food Home Centers Groceries Cargo Car Rental Group Buying Pension Plan Healthy DecorationNote: blank slots refer to targeted segments 5
  6. 6. … and strong accrual and growing redemption network* Accrual Redemption Charity Hotels Financial Institutions Leisure Car Rental Retail and others Other Magazines and Newspapers *non exhaustive 6
  7. 7. Strategy: to diversify gross billings and redemptions Gross billings of points what? to diversify gross billings Current Long term target and redemptions 24% why? 3% • Average unit price increase • Average unit cost reduction 15 to 20% 73% • Controlled breakage decline, favoring member experience TAM Retail, Industry and Services Banks and volume growth Costs of rewards Long term margin expansion Current Long term target how? 98% • Expanding partnerships network 2% 15 to 20% • Increasing marketing actions • Improving client experience Air Tickets OthersNote: based on 3Q11 7
  8. 8. Expanding partnerships networkNew partnerships Expanding partnership network # +26.3% +4.3% Drugstore Group buying 166 161 168 151 133 7 12 15 19 20 Pension Plan Car Rental 3Q10 4Q10 1Q11 2Q11 3Q11 Total Coalition NOTE: Some partnerships with bad performance were canceled in 2Q11. Tickets Charity Increasing non-airline redemptions As % of total points redeemed 3,2% 2,0%Roadmap 0,8% 0,8% 0,9% Groceries, entertainment, restaurants, beauty, others. 3Q10 4Q10 1Q11 2Q11 3Q11 NOTE: it includes points issued before 2010 (TAM’s inventory) 8
  9. 9. Increasing marketing actionsMedia investments Expanding member base Together is so much better. Together is Multiplus. In millions +17.4% +3.7% On board videos TV commercial 8,6 8,9 8,0 8,3 7,6 Press media 3Q10 4Q10 1Q11 2Q11 3Q11 Radio spots, etc Growing gross billings R$ millions 32.4% +12.1%Point-of-sale materials 397,3 325,2 339,9 354,6 300,0 3Q10 4Q10 1Q11 2Q11 3Q11 (collect points here) 9
  10. 10. Improving client experience Point of Sale Accrual and balance checking at the point-of-sale • spread the loyalty concept • speed up the capillarity strategy penetrating new market segments • increase sales in retail market Standard rule: 1 Real ($) = 1 Multiplus point Special rules allowed (such as minimum ticket) adding more value to the partner Multiplus as one product of Redecard’s sales team New website coming soon Other actions Call Center improvements Educational mailings Systems improvements 10
  11. 11. Loyalty market has multiples growth opportunities Expanding credit card usage in Brazil Increasing domestic consumption Credit Card Transaction Value (R$ billions) Personal Consumption Expenditure (R$ billions) CAGR +22% CAGR +12% 2,226 1,966 1,787 314 1,594 256 1,429 215 174 142 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 Source: ABECS Source: IBGE Growing passenger traffic (Airline Segment) Improving wealth distribution RPK in Brazil (billions) 23% Social classes in Brazil* (% of the population) Multiplus’ target 70 57 48 44 40 2003 2014 2006 2007 2008 2009 2010 Source: ANAC Values updated for 2010 Source: Social Policies Center of FGV-Rio *Note: Average income of classes D and E - R$ 6,126/year; class C - R$13,944/year; and classes A and B - R$ 75,942 /year. 11
  12. 12. Thank you.Strong cash generation Low CAPEX requirement Contact IR team +55 11 5105 1847Negative working capital Scalable business free Dividend player